Spot gold was up 0.2 percent at $1,189.58 an ounce at 0715 GMT. On Monday, it fell 1.2 percent, its biggest one-day percentage fall since Aug. 15, and also touched a more than one-week low of $1,183.19.

U.S. gold futures rose 0.4 percent to $1,193.0 an ounce.

“Gold is getting some support from bargain hunting and also some safe haven support on concerns of a potential sell-off in equities,” said Stephen Innes, APAC trading head at OANDA in Singapore.

“I strongly believe the market is underpricing the potential for equity markets to derail. This is a key hedge for gold in my view.”

Asian shares fell on Tuesday as China allowed its currency to slip past a psychological bulwark amid sharp losses in domestic share markets, a shift that pressured other emerging currencies to depreciate to stay competitive.

Meanwhile, the International Monetary Fund on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying that trade policy tensions and imposition of import tariffs were taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.

“Some short-term haven demand is supporting gold prices at current levels because of risk aversion due to ongoing trade wars, political developments including in Italy and outflow of money from the equity markets,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

“However, the monetary policy by the U.S. Federal Reserve is dominating the whole equation, putting downward pressure on gold... The $1,200 level should be the centre of gravity for gold prices to sway back and forth.”

Gold has held in a $34 range for the last 1-1/2 months, which some analysts say suggests resilience. Worries over the damage to emerging market economies from higher U.S. interest rates has spurred safe-haven bidding.

“The current political and economic climate will lead to people buying the dollar but after the dollar, gold is the next preference,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

“Today, there is some short-covering and we also see some fresh buying interest due to lower prices.”

Spot gold may end its weak bounce below a resistance at $1,193 per ounce, and then retest a support at $1,184, as suggested by a projection analysis, according to Reuters technical analyst Wang Tao.

Among other precious metals, spot silver gained 0.4 percent to $14.40. Platinum inched 0.1 percent down to $816.99 an ounce, and palladium dipped 0.1 percent at $1,073.50. (Reporting by Vijaykumar Vedala in Bengaluru; Editing by Amrutha Gayathri and Sunil Nair)